Forex reserves jump to $229 bn

MUMBAI: Foreign exchange reserves rose $3.9 billion during the week ended August 3, with $14.5 billion being added to the country’s forex kitty in the past four weeks.

In the banking sector, while deposit growth continues to be strong, banks are still going slow on extending loans, reports Our Bureau in Mumbai.

According to the figures released by the Reserve Bank of India in its weekly statistical supplement, total forex reserves including gold and special drawing rights (SDR) rose $3,992 million during the reported week to touch $229,342 million. While foreign currency assets rose $3,892 million, value of gold in reserves rose $100 million. The value of SDR in reserves remained unchanged.

FIIs bought close to $7 billion in the month which accounts for about half the pile-up in reserves during the period. Of late, external commercial borrowings (ECBs) and FDI have also emerged as a major source of accretion to the country’s foreign exchange reserves.

However, with the government making it difficult for corporates to tap the ECB route, one could see some slowdown in reserves pile up in the coming weeks.

In the banking sector, banks have mobilised Rs 67,653 crore in the month of July by way of both term deposits (Rs40,422 crore) and demand deposits (Rs 27,231 crore) taking the total deposits to Rs 27,70,512 crore. Loan growth however has to still pick up. New loans during the month amounted to Rs 2,866 crore taking the total loans to Rs 19,17,231 crore.

While food credit dipped Rs 1,772 crore, non-food credit rose Rs 4,594 crore. Total loans have dipped Rs 2,866 crore since April as against growth of Rs 49,784 crore in the same period a year ago. Investments in government and other approved securities rose Rs 24,394 crore during the month to Rs 8,72,281 crore.

In the other developments reported in the WSS, the central government has borrowed an additional Rs 11,444 crore through the WMA window during the week ending August 3 taking the total outstanding to Rs 31,643 crore. WMA- ways and means advances-is a temporary overdraft facility offered by the central bank to the government to meet its revenue mismatches.

State governments on the other hand has borrowed an additional Rs 209 crore during the week taking their WMA outstandings to Rs 1,275 crore as on August 3.